Recent Legislation of Ukraine in RE and EE: Greening the Energy!

1. Recent legislation of Ukraine in RE and EE (accepted from July 2014 till now)Georgiy Geletukha, PhDHead of the Board, Bioenergy Association of UkraineAdvisor of MP Olexander Dombrovskiy, Head of interfraction deputy members group “For Energy Independence of Ukraine” Advisor of Head of the National Agency for Energy Efficiency and Energy Saving We are greening the energy!

2. Recent legislation of Ukraine in RE and EE (accepted from July 2014 till now)

3. Decision of Cabinet of Ministers N293 from 9 July 2014 р “On stimulation of natural gas replacement in heat supply sector” Tariff of 1 Gcalof heat energy for population in DH systems: 10% 822 -598 -508 UAH/Gcal Gas cost: 5 241,37 UAH/th. m3 Gas cost:1 091,2 UAH/th.m3 Natural gas (industry) Natural gas (population) Straw pellets Wood pellets Wood cheeps For compensation of difference in tariffs for heat supply from natural gas to population in DH systems Government allocates at the moment 598 UAH/Gcal. For fuels and energy (other than gas) Government will allocate 508 UAH/Gcal from 1 October 2014according this decision.

4. Recent legislation of Ukraine in RE and EE (continue)

5. Recent legislation of Ukraine in RE and EE (continue)

6. Recent legislation of Ukraine in RE and EE (continue)

7. National Renewable Energy Action Plan till 2020(approved by Government) 5000 mill toe = 6,25bill m3/year 660 MWe, 90% as CHP, 1780 MWth, replacement of natural gas - 0,95bill m3/year. 6,25 + 0,95 – 1,67 = 5,53bill m3/year (objective for 2020).

8. Recent legislation of Ukraine in RE and EE (continue)

9. The CMU Decree #1014-r “About the adoption of the plan of short-term and mid-term measures with respect to reduction of natural gas consumption till 2017” dated 16/10/2014 ) Priority Stutus to projects replacing natural gas by other fuels and energy. Premium for replacement of natural gas to companies installing heat supply equipment on other fuels and energy (than gas) in DH and public sector. Reimbursement of part of the creditsprovided by banks to population for installing of heat supply equipment on other fuels and energy (than gas). Improvement of methodology for calculation of “self cost” and tariff for production of heat from other fuels and energy (than gas): - use of express amortization; - establishment of IRR for such projects not less than25%. Simplification of concession, rentals and lifting of tabu for privatization of objects in communal property. Synchronization of term of “biomass” in Ukrainian legislation with EU Directive 2009/28/EC. Development of technical specifications for injection of biomethane in gas pipe system of Ukraine. Development of stimulation for production and utilization of biomethane.

10. Plan for replacement and reduction of consumption of natural gas till 2017(continue) Changes in Energy Strategy of Ukraine till 2030 in particular in the reduction of gas consumption and increase of renewable energy share. Approval of National Action Plan on Energy Efficiency till 2020 as part of Ukraine obligations before Energy Community. Improvement of state purchase procedure for long term obligations (up to 5 years) in theprojects replacing natural gas by other fuels and energy. Simplification of land allocation procedure for theprojects replacing natural gas by other fuels and energy. Reduction of terms and numbers of permits for theprojects replacing natural gas by other fuels and energy. Improvements of the Laws “On heat supply” and “On nature monopolies”, introduction of stimulating tariffs system. Broad information company for energy efficiency and renewables for replacement of natural gas.

11. Barriers to development of bioenergy created by the Law of Ukraine “On Electricity” Power from biomass sector is in very slow progress at the moment due to some barriers in legislation. As illustration, installed capacity of power stations on RE in Ukraine (January 2014): solar photovoltaic - 807MW; wind - 480MW; small hydro - 77MW; bioenergy - 25 MW. Why? • Incorrect/narrow definition of "biomass"; • Unrealistically high requirement for "local content" of equipment, materials and services: • 50% for power stations on biomass from 01.07.2014 and • 50% for power stations on biogas from 01.01.2015; • Low GT coefficient for power generated from biomass and biogas. • DraftLAW OF UKRAINE «On amendments to certain laws of Ukraine regarding the incentives for power production from alternative energy sources» has been developed recently by SAEE. This draft law is mentioned as priority law in coalition agreement of new Ukrainian Parliament.

12. Green (feed in) tariff for biomass and biogas in EU countries and Ukraine, Eurocents/kWh http://www.res-legal.de/en/search-for-support-scheme.html

13. Conclusions A number of stimulating decisions are already accepted by Ukrainian Government for development of EE, RE and replacement of natural gas. Last 3 months are the most effective for improvements of legislation for stimulation of EE, RE and natural gas replacement in the history of Ukraine. Next steps in the same direction are needed yet and they are already under preparation.

14. Thank you for your attention!Georgiy Geletukha, PhDtel: +380 44 332 9140geletukha@uabio.orgwww.uabio.org